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South Korean restaurants flag concerns over Delivery Hero's €3.6B Woowa deal

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South Korean restaurants flag concerns over Delivery Hero's €3.6B Woowa deal

Restaurant operators in South Korea have raised competition concerns over Delivery Hero SE's €3.6 billion proposal to buy local food ordering and delivery platform Woowa Brothers Corp., Reuters reported Jan. 5, citing a news conference at the South Korean parliament.

Germany's Delivery Hero announced Dec. 13, 2019, that it agreed to buy Woowa for a U.S.-dollar equivalent of €1.7 billion in cash and €1.9 billion in shares.

Reuters, citing data from mobile big data platform IGAWorks, said the deal would create a company with a nearly 99% market share in South Korea's food delivery apps.

"The biggest problem is that the companies can move the market to whatever direction they want to," Kim Kyung-moo, a local restaurant franchisee reportedly said.

The report said restaurant owners are worried that the combined Delivery Hero and Woowa entity would hike commissions that it charges restaurant owners for taking orders through their apps.

Restaurant owners, food delivery riders and lawmakers reportedly urged the Korea Fair Trade Commission to thoroughly review the deal, saying the combination would limit consumer choices.

However, a Woowa spokesman told Reuters that the company is not planning on raising commission fees post-merger. The report added that according to an official at the fair trade commission, Delivery Hero had already submitted an application to the antitrust regulator. The official reportedly declined to comment further.